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This is how markets have reacted to Trump’s latest trade war salvo

11 July 2018 - 07:13
Agency Staff

US president Donald Trump. Picture: REUTERS

Global markets already caught in the crossfire of Donald Trump’s escalating trade conflict with China took yet another hit, after the US pushed ahead on Wednesday with plans to impose tariffs on an additional $200bn in Chinese goods.

Stocks and industrial metals were most affected in the wake of the news, while havens from the yen to US Treasuries reacted with modest gains.

The 10% tariffs proposed on items from clothing to television components to refrigerators further escalates a trade conflict that has helped wipe out $2-trillion in value from global stock markets in the past month, according to data compiled by Bloomberg.

"The fear is that the trade war is far from being over and tariffs will be enacted on both sides, reducing international trade and causing inflation, hurting investor sentiment," Tim Ghriskey, chief investment strategist with Inverness Counsel, said in a phone interview.

"The fear about these tariffs that the markets have is real."

Here’s a look at how various markets across the globe reacted:

• Wall Street: S&P 500 and Dow Jones futures slumped as much as 1.1%.

• Yuan: China’s currency weakened further, falling as much as 0.6% against the dollar in the biggest move among Asian currencies before paring losses.

Three-month copper on the London Metal Exchange dropped as much as 3.8% to $6,092.50 a tonne, its lowest since July 25 last year. It was down 3% at $6,140 by 3.23am GMT.

On the Shanghai Futures Exchange, the most-traded copper fell as far as 47,800 yuan ($7,175) a tonne, its weakest since June 23 last year.

Zinc was also hard hit, with the metal dropping by its 6% downside limit in Shanghai to 20,620 yuan a tonne, the lowest since June 22 last year. It fell as much as 4.8% to $2,503 in London, the lowest since June 15 2017.